CHESSNOID

It seems that the pace of bank closures are increasing as we get closer to the end of the year.   These are not just single banks but chains of bank representing many branch locations.  We are up to 123 officially closed banks taken over by the FDIC.  Some of these banks were TARP recipients and loss more tax payer money.  The main cause of these bank closings are the increasing foreclosures of homes on their books.  They may have new accounting tricks to hide the losses under the mark to market rules, but that doesn’t stop that decreasing stream of revenues from the empty sitting houses on the books.

One of the problems with the federal government just issuing TARP money is that they do nothing to improve the operations of the bank.  The banks are making bad decisions and losing money, so giving the banks more money just allows them to continue what they are doing for a bit longer.  There is no transparency or accountability, so to expect improvement is unrealistic.   That doesn’t solve the problem and eventually they meet the same ending.

Nov. 14 (Bloomberg) –

Iberiabank Corp., the Louisiana- based lender that exited a federal government assistance program this year, purchased two banks as the U.S. economy’s expansion fails to halt financial-firm collapses.

Iberiabank added $2.5 billion in deposits and 34 branches by acquiring Florida-based lenders Orion Bank and Century Bank, the company said in a statement. The southern Florida deals will boost earnings in coming years, Iberiabank said.

Orion and Century “possess very strong deposit market- share positions in five very attractive Florida” areas, Iberiabank Chief Executive Officer Daryl Byrd said yesterday in the statement.

Banks are failing at the fastest pace in 17 years even as the U.S. economy shows signs of pulling out of the recession. The world’s largest economy grew at a 3.5 percent annual pace in the third quarter, the first gain in more than a year, according to the Commerce Department. The number of failed banks reached 179 in 1992.

Iberiabank rose 64 cents to $44.40 in regular Nasdaq trading before the deals were announced. The Lafayette, Louisiana-based company has fallen 15 percent in the past year.

Sunwest Bank of Tustin, California, also purchased a failed bank in its home state yesterday, according to the Federal Deposit Insurance Corp., which was named receiver for all three transactions. Sunwest assumed the $130.9 million in deposits and $134.4 million in assets at Pacific Coast National Bank of San Clemente, California.